jaje: “The tipping point will be cutting out the dividend entirely – the legacy GM shareholders will no longer allow their dwindling investments to not reward them for their ignorant support of Red Ink Rick and Bozo Bob. Until then it’s business as usual rearranging the deck chairs on SS GM.”

Yeah, losing that dividend is really the key to waking GM up to their dire situation. Roger Smith was quite proud of the fact that the dividend was paid every year during his disasterous 10-year tenure at the helm of GM. It didn’t matter to him the market share that GM had lost during the same period.

So long as the primary emphasis is placed on paying that miserable dividend (which is exactly the mindset of all the finance guys running the show at GM), until it’s gone, nothing is really going to change about the way GM operates.

http://www.nytimes.com/specials/downsize/gm-strike.html

Google “uaw strikes 1996″ for more news stories…

Hey they should have shoved the big profits from trucks into small car development.Instead they lined thier pockets.Now we pay the price.

GM’s enterprise value is still pretty high due to high debt.
The real problem: lack of positive cashflow to support that debt.

Facts are neither the UAW or the CAW has sactioned any ilegal walkouts in the last 25 yrs.

Just wanted to set the record straight.Let not forget that at any time manangement could of drawn a line in the sand.But nobody at a senior management level had the balls to do it.Heaven forbid it might have impacted thier bonus.

The union fullfilled thier obligation to get the best possible deal for the rank and file.Management caved and management and only management is why the big 3 are in doo doo.

Stock markets and all the loop wholes in a company seem pretty complicated. Anyhow not my company, although I feel angry when thinking about some of this stuff, I’ll need to let go and let go and vent…..fuck GM.

I really am not aware of all that is logical in business, especially one the size of GM. Its prudent to learn about these kind of business for the knowledge of were exactly the money is going. Still priorities need to be choosen, and perhaps bailing a company out of C11 is the seemingly best available option. A better choice for the economy and everyone’s financial bottom line in this generation. Life is not fair and things can get a lot worse. Its not just doing the right things morally and ethically. Balancing ethics, morality, and welfare often means sacrificing some good.

Sometimes, punting problems down the road IS logical because making hard decisions NOW is so risky. That they’ve done this over and over is breathtaking, but understandable.

Changing GM’s culture when it was profitable would have been very risky – given the ingrained attitudes in management and labor. (Examples: Wildcat strikes in the 90’s and allowing models to whither without updates).

The “GM that-could-have-been” example that comes to mind is Caterpillar. But any attempt to employ a Caterpillar solution to GM at that time would have resulted in horrific publicity, political pressure, (possible) judicial expropriation, and (possible) violence.

Few firms have management up to such a challenge.

Grab what you can and then bail out with your golden parachute and screw everyone else.

Us hourly, and to be fair some of the lower salary have no choice,but to keep our head down and our mouth shut.Bunker mentality is the term that comes to mind

The older and wiser mnagement is now taking the same attitude.Lots of For Sale signs in the high end neighborhoods.If the ship goes down the casualty list will be horendous.Shareholders will
just be collateral damage.

I pesonally think GM can be saved but its gonn’a take a massive change.At this point I don’t see that happening.

Take, for instance, the comparison made above: GM vs SBUX. GM’s market cap is $7.25B while SBUX is at $11.90. SBUX is twice as important as GM, right? Wrong. GM’s Enterprise Value is booked at $28.13B while SBUX is booked at $12.75B. By that measure, GM is over twice as important as SBUX (not the other way around), only their equity price is hobbled by a large proportion of debt and a bleak sector outlook. Take another financial measure: GM’s yearly revenue is $180.41B, while SBUX is at $10.09B. By that measure, GM is 18 times more significant than SBUX. All these stats are available at any financial website — even Yahoo Finance.

I could go on. The point is, equity is “risk capital.” It’s the first thing to be rewarded when times are good, and the first thing to be wiped out when things go wrong. GM’s pathetic market cap reflects the fact that it is saddled with debt and struggling to compete in a huge but struggling sector, not that it is “insignificant.” GM may have been a bad investment to a stock buyer, but it’s still a huge deal economically — a much bigger deal than Starbucks.

One final point is that once a company has as much debt as GM has, and is sailing in such choppy waters, the folks in charge start to have a moral and potentially legal obligation to look out for the bondholders and lenders, not just the shareholders. This may also color the acts of the BoD.

I’ll add that there must be a major conflict of interest due to the friendships of Rick and the BOD. I cannot understand how a company can slide so quickly into the red and not have a major shake up of its tip tier management. The BOD must be getting something major out of this that they will keep him in charge.

As for the GM board, if ANY BoD has been negligent, these people have. Where the hell are the share holders? They need to get some litigation going to take these bystanders to the cleaners personally. A WSJ article from a few days ago dealt with CEO compensation. The boards of some companies are deciding that millions per year are enough and that the CEOs don’t need a going-away present too.

http://www.bloomberg.com/apps/news?pid=20601103&sid=a6SMjLqT9mzw&refer=news

Then, watching GM sell off all of the family silver (i.e. what once made it a conglomerate), and finally even family jewels (such as GMAC) left them not only unable to sell anything further off to stave off the inevitable, but emasculated too (sorry, couldn’t resist).

You have the Board of Directors (BOD) happily standing by current management whilst they lose 50% of their market cap. in half a year. What exactly will it take before the BOD lose confidence in current management?

People have been sacked for less.

Personally, I find it disgusting that the rank and file are ALWAYS expected to make make concessions (i.e lose jobs) when there’s a slight downturn in the market. But if management lose $6.8 billion in 6 months, no-one is accountable for it.

And DC wants to bail this company out…..?